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October 10, 2013

Firm Reaps Huge Growth Fulfilling Advisors’ To-Do Lists

Inc. 500 company has grown 1,218% by providing extra hands for busy advisors

Robert Fross of Platinum Advisor Strategies.

The companies on the Inc. 500 list of fastest growing privately held companies are a diverse lot, to be sure, but one of them — No. 362 to be precise — has achieved its meteoric rise by propelling financial advisors' businesses.

Inc.’s stats show Platinum Advisor Strategies has grown 1,218% over the past three years, reaching 2012 revenue of $2.3 million—three years after its 2009 founding.

And it is the unmet needs of beleaguered financial advisors that are fueling that rapid-fire growth, according to Platinum’s CEO and co-founder, Robert Fross.

“Our growth is the result of the desire our industry has for a company that can help advisors do the things they know they need to do,” Fross told ThinkAdvisor in a phone interview from Washington, where Fross is attending Inc.’s annual awards ceremony for companies that made its 2013 list.

But Platinum’s growth has already zoomed past its 2013 Inc. listing, which among other statistics, shows 825 financial advisors being served by 15 employees.

Today, the advisor services company’s 23 employees serve nearly 1,000 financial advisors, and Fross says Platinum is committed to adding staff as necessary to keep up with the advisor work flow.

Employees of The Villages, Fla.-based company — dubbed “advisor’s assistants” — work “as an extension of advisors’ offices—they work almost as an employee of the advisor,” Fross says.

“In our business, we have coaches to tell advisors what to do. What we’ve found is the hole in our business is not telling advisors what to do, but providing a service we can do for advisors.

“[Advisors are] told we need to communicate more regularly with clients, do more client events, connect on a more personal level, be more involved in social media,” Fross continues. “What most of these coaches don’t realize is we already know that. But we’re already busy working as financial advisors for a living. If you expect me to also be an events coordinator, that’s unrealistic.”

That’s where Platinum’s advisor’s assistants come in—they’ll tweet, blog, post on LinkedIn in addition to other branding and communications tasks, while Platinum’s office systems and turnkey prospecting initiatives designed to let advisors just “show up.”

“Most [coaching-type] companies teach the advisor how to fish, or show him how to fish; we take them to the pond and cast the line, then hand them the rod,” Fross says.

The idea for a company that would help advisors grow stemmed from the rapid growth Fross’ own wealth management company experienced. Fross and his twin brother, Thomas, remains actively engaged in their own Fross & Fross Wealth Management firm, which they started in 2007 after working five years with another indie firm.

The financial crisis proved no barrier to Fross & Fross’ growth, from $160 million in assets in 2007 to about $400 million today.

“Because we were communicating so regularly, we retained our clients. So many people weren’t hearing from their advisors — so that was an opportunity to attract new clients. We were very much in front of them,” he says.

Fross says lack of communication is the No. 1 reason people leave their advisor. So Platinum offers its white papers, newsletters, conference call and video scripts, e-mail updates and other communications to help its advisors similarly stay in front of their clients.

“We connect the dots between what the advisor knows he needs to do and what he has time to do,” citing a “State of the Market” assessment as an example.

“The advisor has to build the presentation, do the research and get approved by compliance. For all those reason few advisors will ever do a State of the Market.

“We personalize invitations with advisors’ broker-dealer disclosure statement under the event; build the PowerPoint; get it approved by the advisor’s compliance department; have it printed and mailed for him. All he has to do is show up and read the speaker notes and address what’s going on in market,” Fross says.

Such services are especially valuable for independent advisors, since wirehouses often handle these details, which he says are a challenge for independent advisors. “Our comp has really stepped in to fill that niche,” he says.

The Platinum CEO adds that compliance departments view his firm as an ally.

“LPL can approve this commentary 100 times or once,” he says. “We try to make it as easy as possible and they in turn appreciate that advisors are doing things the right way.”

The do-it-for-you approach applies in more esoteric areas as well. Platinum members can organize a wine tasting with Platinum’s help, for example.

“We tell them what to buy, where to buy it, get it approved with their back office and send off invitations on their behalf. All the [advisor] has to do is read the tasting notes that we give him,” Fross says.

Asked whether the provision of all this content undermines a sense of authenticity on the advisor’s part, the Platinum CEO responds:

“We encourage all of our reps to get involved," he says. "Our more successful reps do get involved. But if they solely take on all that responsibility, most will become so overwhelmed that they can’t serve their clients, or they’ll just stop [these activities]. The worst thing an advisor can do is not be consistent in their communications.”

The cost for Platinum’s extra hands varies depending on the level of service the advisors is seeking. Members who want all of the firm’s newsletters, office systems and social media support pay $350 a month, while a smaller segment that want a website and assistance updating blogs and social media pay an additional $200 a month (after a $2,400 setup fee.)

In response to advisor demand, Platinum expects to announce “within the next 30 days” a new coaching program that will formally commence in January.

Fross says advisors who have taken fullest advantage of the firm’s services have seen year-on-year growth between 50% and 90%.

The reason, he says, is “they don’t have to reinvent the wheel because they can use things we [Fross & Fross] have taken years developing and refining.

Fross compares advisors lacking Platinum’s range of services and office systems to “a gentleman [who] had courted his fiancee for months, proposes, then she doesn’t hear from him for six months."

“Our systems allow you to make sure things don’t fall through the cracks,” Fross says.